Since 1954, the Internal Revenue Service (“IRS”) has prohibited all tax-exempt religious organizations from engaging in any amount of activity in political affairs or campaigns.1 Because this prohibition lies in the sensitive intersection between religion and politics, there is lively debate over the constitutionality of the IRS’s position. However, this debate has not proved to have any real-world effect on the prohibition, since neither the IRS nor Congress has meaningfully changed its stance in the fifty-plus year history of the prohibition. Moreover, the Supreme Court has commented on the constitutionality of the provision on several occasions. Although some members of Congress sought to reverse the IRS’s treatment of political religious speech with the introduction of the Houses of Worship Political Speech Protection Act in 2002, this attempt proved to be futile when the bill was defeated in Congress by a vote of 178 to 239.2
This Note argues that the religious organization political activity prohibition in the Internal Revenue Code (“IRC” or the “Code”) is largely symbolic and does not prevent a meaningful number of religious organizations from expressing their political views. Although symbolism is an integral part of the prohibition, it is nonetheless constitutional, and it is a needed part of tax law in order to maintain the federal government’s stance of neutrality, as well as the doctrine of separation of church and state. In order to demonstrate the symbolic nature of the prohibition, I focus principally on several ways in which the IRS’s proscription is circumvented, both through other tax provisions and the workings of the legal system in general. In Part II, I focus on the constitutional framework of the political activity prohibition, specifically the Establishment Clause, the Free Exercise Clause, and their engagement with tax-exemption principles. In Part III, I turn to the prohibition itself, including the history of the provision and the current state of the law. In Part IV, I consider the somewhat varied interpretation of the prohibition by both the judicial branch and the IRS. Part V focuses on several factors that undercut the political activity prohibition, including methods through which religious organizations can voice their specific political messages while remaining tax-exempt under federal income tax law. In conclusion, I argue that although it is largely undercut by different factors and mechanisms, the political prohibition is both justified and constitutional and it ultimately serves a needed role in the intersection of federal tax and constitutional jurisprudence.
1. See I.R.C. § 501(c)(3) (2006) (originally enacted in 1954 and conditioning tax-exemption on not participating in political activity). 1122 Alabama Law Review [Vol. 61:5:1121
2. See Houses of Worship Political Speech Protection Act, H.R. 2357, 107th Cong. (2002).
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